the economics of science

There’s a nice feature about Scott Stern who studies the behavior of scientists. There’s a quote from guest blogger emeritus Pierre Azoulay, as well, who knows Stern:

“There is already a whole cohort of us for whom Scott was an essential part of our graduate educations,” says Pierre Azoulay, an associate professor at Sloan, who as an MIT doctoral student had Stern as one of his advisers.

The write up has some nice summaries of Stern’s research, in which he examines the trade offs that scientists make, such as taking a pay cut in private firm jobs in exchange for more control over how the science is spread.

The one thing that left me scratching my head are quotes like this: “From this research, Stern synthesized an insight that remains with him today. “Scientists don’t only care about money,” he says. “They care about discovery, and control. Those are just first-order facts about the scientific enterprise.”

The Stern quote hits on a theme that has been old hat in the social analysis of science since the day of Merton, if not earlier. Why are economists constantly surprised by these findings? Isn’t variance in human motivation the plausible prior hypothesis? Don’t economists believe in differences in personality and socialization? Isn’t the real question the degree to which specific activities are governed by financial considerations, not  treating non-financial considerations as anomalies?

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Written by fabiorojas

February 11, 2012 at 12:02 am

Posted in economics, fabio

6 Responses

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  1. Nice post Fabio. But why do you think economists would be surprised? Many if not most of them (including myself) pursued an academic career rather than an industry fully knowing that money was left on the table because we wanted the freedom to pursue our interests via the academy. This is commonly discussed among economists, including econ grad students on the job market.



    February 11, 2012 at 12:14 am

  2. Ironically, it is the economists championing capitalism who recognize that money is not a primary motivator for scientists, artists, and other creatives.

    “The activities of these prodigious men cannot be fully subsumed under
    the praxeological concept of labor. They are not labor because they are for
    the genius not means, but ends in themselves. He lives in creating and
    inventing. For him there is not leisure, only intermissions of temporary
    sterility and frustration. His incentive is not the desire to bring about a result,
    but the act of producing it. The accomplishment gratifies him neither
    mediately nor immediately. It does not gratify him mediately because his
    fellow men at best are unconcerned about it, more often even greet it with
    taunts, sneers, and persecution. Many a genius could have used his gifts to
    render his life agreeable and joyful; he did not even consider such a
    possibility and chose the thorny path without hesitation. The genius wants
    to accomplish what he considers his mission, even if he knows that he moves
    toward his own disaster.” Von Mises Human Action, 4th ed., page 139.


    Michael Marotta

    February 11, 2012 at 5:34 am

  3. There is such thing as “good enough”. Good enough salary, IQ, fitness level. At some point marginal increase in a particular attribute brings in so little marginal benefit that the prospect of increase becomes irrelevant in a specific context. For instance if one wants to teach college math, having IQ of 150 is probably not that much more better than 130. The same goes for money. Apparently, when a scientist makes, say, 100 thousand dollars a year, marginal increase in work conditions (independence etc.) becomes more important than marginal increase in salary.



    February 11, 2012 at 6:31 am

  4. perhaps he’s a behavioral economist, or being in the business school has exposed him to the sociologists like zuckerman?



    February 11, 2012 at 6:31 pm

  5. I don’t think Scott is saying economists would be surprised (we do have disutility in the labor function, after all!), but definitely managers might be surprised, particularly by the magnitudes. He has a paper, for instance, showing that some researchers need to be compensated tens of thousands of dollars if they are unable to publish their research in scholarly journals because the firm wants to keep it secret. As the first commenter mentions, economists are well aware of this tradeoff – Wall Street/consulting definitely pays PhD economists better than academia.



    February 11, 2012 at 11:04 pm

  6. I’m not sure which economists are supposed to be surprised. Compensating differentials is a very old idea in economics. One of the early economists’ criticisms of socialism, for example, argued that nobody would take out the trash, since equal wages wouldn’t be enough for the nasty work.

    An interesting related question is why society at large is convinced that economists obsess about money when they have, since Smith (Theory of Moral Sentiments), Bentham and Mill, been interested in utility. Utility is a separate concept because it includes non-money.



    February 14, 2012 at 11:56 am

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